I’ve been quite taken with Thomas Palley’s few but very high quality posts, particularly since they have often made bold, persuasive arguments. Today, however, he does himself a disservice by giving a well written but conventional (among US academic economists) defense of the central bank’s conduct. Note that he deals only with monetary policy (he […]
Read more...Reader Michael called to my attention a wide-ranging interview with Nassim Nicholas Taleb, author of the Black Swan and professional iconoclast, in the Times of London. The article is colorful, wide-ranging, and a bit long, so I’ve excerpted some of the most provocative bits. Needless to say, I am particularly taken by his dim view […]
Read more...Below is an article in the New York Review of Books by John Cassidy about a new book by Richard Thaler and Cass Sunstein, Nudge: Improving Decisions About Health, Wealth, and Happiness. The piece does a good job of giving an overview of behavioral economics, presenting (and critiquing) how Thaler and Sunstein see it being […]
Read more...I somehow missed this piece by Robert Nadeau in Scientific American when it came out earlier this year, and I thought it made for good Sunday/holiday reading. Nadeau’s criticisms are admittedly pretty broad and similar observations have been made elsewhere (although Nadeau does add some useful historical detail), and a short piece by a non-expert […]
Read more...I kid you not, the headline above is a faithful representation of the thrust of an article today in the New York Times, “The Scars of Losing a Home,” by Yale economist Robert Shiller. With friends like this, liberals have no need of enemies. Shiller’s argument is ludicrous: implement the legislation before Congress, which guarantes […]
Read more...Willem Buiter argues that the focus on oil and food price shocks, which economists view as relative price changes rather than inflation, is muddying the discussion about inflation. He sees considerable evidence of widespread inflation and it’s central bankers’ fault. From Buiter: Inflation is rising just about everywhere. Why is this and what can be […]
Read more...Cassandra takes what she admits to be a flier at a topic worthy of deeper examination: Do you think The People are less discontented under an inflationary regime or a deflationary regime? She reaches a conclusion, no doubt colored by her deep association with Japan, that deflation is not as bad as it is touted […]
Read more...I must admit that I have never fallen in love with an investment. Yet per the summary of an article in International Journal of Psychoanalysis (hat tip 2ubh, investors are prone to “emotional inflation” similar to what people experience in romantic relationships. But the piece leaves key questions unanswered: do depressives or paranoid schizoids make […]
Read more...In Project Syndicate (hat tip Mark Thoma), Joseph Stiglitz takes on an increasingly common approach among central banks, namely, to announce a formal target for inflation and use interest rate policy to attempt to achieve it. Note the US does not use this approach, although one of the Fed’s responsibilities is to maintain price stability. […]
Read more...Steve Waldman at Interfludity did me the high compliment of picking up on an issue that is important to me and running with it: Yves Smith packs a powerful insight into an unassuming sentence: Liquidity is not a virtue in and of itself unless it produces a benefit to the real economy. Liquidity is often […]
Read more...Larry Summers, in “America needs to make a new case for trade,” worries, as do many others, about rising protectionist sentiments: In a world where Americans can legitimately doubt whether the success of the global economy is good for them, it will be In a world where Americans can legitimately doubt whether the success of […]
Read more...In “Japan may be rigid but it is not inefficient,” David Philig takes issue with metrics that find Japan’s service economy to be woefully inefficient. The commonly used yardstick is labor productivity, and Japan allegedly scores badly due to its tendency to have high staff ratios (for instance, those ladies in hotels who walk you […]
Read more...Carmen Reinhart has provided a synopsis of a paper she did with Kenneth Rogoff looking at financial crises over a longer time frame than most analyses, which have limited themselves to recent history (the economist’s version of the drunk looking under the street light for his keys because that’s where the light is good, as […]
Read more...Paul Krugman, commenting on a Wall Street Journal article that invoked, then tried to dismiss, concerns about resource scarcity, defended Malthus: Malthus was right about the whole of human history up until his own era. Sumerian peasants in the 30th century BC lived on the edge of subsistence; so did French peasants in the 18th […]
Read more...Ann Pettifor argues in The Guardian’s Comment is Free discusses some misperceptions about our current economic crisis and argues that the wrong lessons are being drawn from 1929. She writes from a UK vantage but much of the discussion is relevant to the US: In debates about the financial crisis – on the left and […]
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